~ Flood Hazard Determination Companies assist lenders in deciding if flood insurance should be a mandated condition for a mortgage or other loan on your home/business property. They base their decisions on a minimal of information submitted by the lender. While FEMA maintains and distributes a listing of Determination Companies, they will not recommend or support the use of any company. Since a positive determination can cost you thousands of dollars in premiums over the life of a loan, any decision to mandate flood insurance on your home/business property should never be solely based upon the decision of a Determination Company. An on site appraisal by Knapp Associates will provide you with an accurate review of property/structure's flood susceptibility, and potential for a successful appeal for removal from the floodplain and the mandatory flood insurance purchase requirement.

~ Flood Insurance provides separate coverage for structures and contents.

~ $1000 deductibles apply separately to structure and contents on all pre-FIRM strictures.

~ Pre-FIRM means structures built or substantially improved before the date of a community's first FIRM. In many cases this is the date the municipality converted to the regular phase of the NFIP. Flood insurance premium rates are federally subsidized and the same for similar structures regardless of risk.

~ Post-FIRM means structures built or substantially improved after the date of a community's first FIRM. Structures are rated based upon the elevation of the lowest floor including basement and compliance with local floodplain management regulations.

~ Post FIRM construction and substantially improved structures are rated for flood insurance based upon the relationship of the lowest floor including basement to either the base or 100 year flood elevation or the highest adjacent grade depending on flood zone designation.

~ Flood Insurance premiums on a pre-FIRM $100,000 home with $50,000 of contents coverage are approximately $945/year.

~ Structures built or substantially improved in violation of federal, state and local floodplain standards may pay annual premiums of $2500 or more per year.

~ Premium rates are set by the Federal Insurance Administration ( F.I.A ) and should not vary from one agent to another.

~ If incorrectly rated for flood insurance, claims may be reduced based upon the premium paid and the corrected premium or you may be required to pay the difference prior to receiving your claim.

~ Flood insurance will not cover all flood damages incurred by your home. Flooding which enters your basement/cellar through the walls or floors from saturated ground is not covered. Flood waters must flow over the ground and enter the basement/cellar via windows/vents.

The following example shows how the purchase of a home may become complicated when floodplains are involved:

   SITUATION: A family purchases a repossessed property and home from a lender who indicates that flood insurance will be a condition of the mortgage. The insurance agent is contacted and determines that the structure is not in the SFHA and issues a preferred risk policy. Submission of the policy to the lender returns a mandate from their FZDC that the structure is in the SFHA and the preferred risk policy is unacceptable. Accordingly, application is made for a standard flood insurance policy for location within an “A” zone. Since the structure is post FIRM, it must now be actuarial rated based upon the relationship between the lowest floor and the highest adjacent grade. Since the municipal floodplain administrator also believed the proposed structure to be outside the SFHA no elevation or other requirements pursuant to the community’s floodplain management regulations were required. Now the structure constitutes a violation of the floodplain development standards since it was not elevated at the time of construction and will be charged a flood insurance premium rate of $2500 per year. This amount when placed in escrow by the lender now jeopardizes the family’s ability to keep the property.

   SOLUTION: A flood hazard appraisal was conducted on the property. Based upon field measurements, the actual location of the structure was just outside the SFHA. Since there is no property survey documenting the position of the structure relative to the river, the delineated floodplain and the property lines, attempting to persuade the FZDC to reverse their decision would be a waste of time. The only solution here was to file an appeal with FEMA requesting removal of the structure from the floodplain. Located in an unstudied floodplain, Zone “A”,  base or 100 year elevations were not available. Fortunately, a previous appeal submitted on a commercial property a short distance downstream included base or 100 year elevations established for that property. Accordingly, an appeal requesting removal of the structure was made by submission of a documentation report, elevation certificate and hydraulic information from the downstream study. This appeal remains open but approval is expected in the near future.

~ Please address specific questions by mail, telephone or e-mail to knappa510@msn.com